paying for college - reality!

Our son graduates this spring. He's a National Merit Finalist, so he's had plenty of scholarship offers ranging from a completely free education to an award of merely $1,000 for his accomplishments.

It's been, well, interesting, to learn the strategies of colleges, the College Board, and others in the business of "helping" parents find out how to pay for college! The approach is similar to that of a car salesman, or a realtor, "helping" you find a way to pay for a car or house you just might not be able to afford.

In every other area of responsible adult financial life, planners encourage people to look at their household budget and cash flow situation to determine if they can afford that house, car, big-screen tv, vacation, or whatever. When it comes to college costs, however, you'll notice a different strategy. Rather than determine what you can *afford*, you are encouraged to see what your "expected family contribution" will be. When you see the resulting number, it may look so ridiculously high you don't believe it's possible your family will be expected to pay that much per year for college. I assure you, that number is about right, and yes, they do expect you to pay that much each year. (But not to worry --- you will be flooded with information about loans, even if you have indicated no interest in going into debt! In other words, forget the price tag, just buy what you want - on credit.)

*Nowhere* in the college planning assistance areas will you find advice to sit down with your budget, look at your total annual household costs and savings and determine how much per year you can pay for your child's education. But if you do this *first*, you'll have a much clearer idea of what your options are -- especially if you want your child to attend college without mortgaging his future, or the family's.

I sat my husband and son down and showed them our actual expenses for the last year. I showed them what we had coming in, and where it all went. (And my husband works 3 jobs so I can home school.) Looking at what we could actually afford *finally* took the stars out of my husband's and son's eyes. I had kept telling them there was no way to afford most of the schools being considered, but they somehow kept believing there was an extra pile of money somewhere, or that money would fall out of the sky, or something!

I wish we had sat down and done this earlier. I would have been able to steer my son to a more realistic choice of schools. (Kind of like figuring out what kind of car you can afford, and then looking at cars in that price range.) There is not much merit money out there for really smart non-minority students. Just look at the college web sites and check out "merit-based aid" in the financial aid area. You might have to look hard, but you ought to be able to find the dollar amounts. Did you know the Ivy league does not award any merit scholarships? Only need-based; if your family household income is less than 20,000, you are in good shape. But if that is not your situation, use the College Board calculator to see what your expected family contribution will be. Be aware that the expectation *is* that you will pay that EFC each year. But if you can't afford it, you are encouraged to go into debt to cover the expense. Work-study is sometimes offered in a limited number of cases...to the tune of about $2500 per year. If your EFC is $18,000 or more, that work-study ain't going very far!

Because he is a National Merit Finalist, my son chose a college which offered him more financial incentive than the token $1000 award. We are in good shape, and he can go to college practically for free. But without the merit award, a smart kid like him, from a middle class home like ours, would have few options for 4-year college besides going into debt.

We have a couple other sons who are bright. Now that I know what we can afford, we are being more realistic about where to encourage them to apply. I'm convinced they can be happy anywhere, and would be accepted, like my eldest son, at some great and competitive schools. But there is no value in dreaming about, or getting emotionally committted to a school we can't afford.

There's the song and dance about how borrowing to go to a "good" college will pay off as an investment, but again, that's like buying stock on margin (borrowing money to invest in "good" companies in the stock market). Dh and I attended excellent colleges, and the undergraduate insitution did not determine our futures. However, having to pay off the educational loans very definitely affected our family, savings, and ability to cover emergencies for many years after. I hated it.

The whole thing kinda makes you feel like there's a bit of a conspiracy the way all these folks avoid suggesting that you look at your own family finances *before* you start the college application process!

Sorry this is so long! I wish someone had spelled this out for me a long time ago. Maybe I would not have believed it back then, but maybe I would have sat down, run the family budget numbers, and used the College Board calculator to get a clue.